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Real Estate Appraisal: What Do Home Appraisers Look For?

Real estate appraisal is an inevitable part of buying or selling a residential property. Even if the buyer really likes the place and is ready to pay the seller’s asking price, their lender will still want to have a professional appraiser carefully inspect the property in question to determine its value. 

In previous articles, we pointed out the crucial differences between a home appraisal and an inspection provided by a San Diego home inspection company. Now we’ll explain more about how real estate appraisal works and what appraisers are looking for when they examine a property.

Read on to learn more. 

What do appraisers look for in a home inspection?

The purpose of real estate appraisal is to determine the value of a home while the goal of a home inspection is to assess its condition. The appraisal report directly affects the mortgage the lender will be legally allowed to give out. 

When inspecting a property, real estate appraisers look for the following:

External factors:

  • Neighborhood characteristics (eg., rural, suburban, urban, etc.)
  • Driveway characteristics (single-car garage vs two-car garage, etc.)
  • Type of housing (one-unit, two-to-four unit, commercial, multifamily, etc.)
  • Size of the lot
  • Zoning classification
  • Public utilities on the property (if any)

Internal factors:

  • Materials used for windows, floors, and walls
  • Number of bedrooms and bathrooms
  • Square footage of the property
  • Updated vs remodeled baths or kitchens
  • Whether there’s a partial or full attic, basement, or crawl space
  • Type of foundation
  • Obvious signs of pest infestations (eg., termite dirt on windowsills)
  • Presence of smoke detectors and handrails

General condition:

  • Walls
  • Foundation
  • Roof surface
  • Gutters
  • Screens
  • Downspouts
  • Floors
  • Trim
  • Structural integrity

Additions, improvements, and upgrades:

  • Wood stoves or fireplaces
  • Fencing
  • A deck or patio
  • A porch
  • Energy-efficient items
  • Swimming pool
  • New roof
  • New AC system

What appraisers do NOT look for:

A home’s aesthetic isn’t an important factor when it comes to determining its market value. Anything that isn’t nailed down and can be carried away is viewed as personal property and not part of the home. 

For example, a modern microwave doesn’t make the house more valuable. On the other hand, sellers should notify the appraiser of any property that’s being sold together with the house (such as a boat), as that may affect the final value. 

What if a home fails to appraise?

Sometimes, an appraisal comes in lower than the price the seller has offered for the property. This doesn’t happen often, but it does occur sometimes. Knowing what to do when it does will help make your home buying or selling experience a lot less stressful.

Consider doing some of the following:

  • Renegotiate the price to be more in line with the true property value as determined by the real estate appraiser. 
  • Find another lender. Not all appraisers come to the same conclusions. By going to a different bank, you may find an appraiser who may think more favorably about the property you wish to buy.
  • Challenge the appraisal report. Appraisals aren’t set in stone. By providing the appraiser with information that justifies the higher price, you may be able to challenge the original appraisal.
  • Request another appraisal. Wait a couple months and then have the home re-appraised by a different appraiser. 

Where can I find a first-rate San Diego home inspection company?

Where can I find a first-rate San Diego home inspection companyKnowing the real market value of a property is crucial regardless of whether it’s an apartment in Gaslamp Quarter or a house in the suburbs. What’s even more important is identifying any severe problems the property may have before you buy or sell it.

That’s where Inspectors Company comes in. As the premier home inspection company in San Diego, we are superbly equipped to provide you with top-of-the-line home inspection services. Call us today.

Top 8 Factors That Affect Your Home Appraisal Value

The job of a home inspector who works for a San Diego house inspection company is to assess the condition of a house or apartment with the goal of informing their client (buyer or seller) about any defects the property might have.

On the other hand, a real estate appraisal is requested by the lender in order to determine the real market value of the home in question. This will not only ensure the property isn’t priced too steeply, but also affect the final sum the lender is able to offer to the buyer.

Whether you’re a seller looking to boost the market value of your property, or a buyer trying to figure out whether your property of choice can pass the appraisal, knowing what real estate appraisers focus on is critical in order to be able to plan ahead. Read on. 

What increases the value of your home appraisal?

Like home inspection, real estate appraisal can play a crucial role in the home buying or selling process. However, unlike home inspection, appraisal isn’t optional. This is because lenders use appraisals to determine the mortgage they can give the home buyer.

Here are the 8 most important factors that influence a home appraisal:

1. Location

The neighborhood the house is located in and its physical position inside that neighborhood will have a considerable effect on its value. 

A great neighborhood has the following traits:

  • High-quality schools
  • Low crime rates
  • Is walkable
  • Is close to a hospital, police station, and/or fire station
  • Has well-maintained streetlamps, roads, etc.
  • It’s not located next to a busy thoroughfare
  • Nearby houses are owner-occupied rather than foreclosed, for-sale, or rented

2. Construction materials used

Newer homes that were built using modern materials, or updated to use them, are valued higher than their older counterparts. 

High-value updates include:

  • New roofing
  • Added insulation
  • New siding
  • High-quality door
  • High-quality windows
  • Updated electrical
  • Removal of hazardous materials such as asbestos

3. Age

Newer homes generally have fewer problems than older properties and therefore tend to get a high appraisal. However, older homes that have been maintained well or are located in historic districts such as Old Town San Diego can also command a high value.

4. Curb appeal

The better the landscaping and the general curb appeal of a house, the better its appraisal value will be. A well-maintained yard with plants that are easy to care for is a huge bonus.

5. Bedrooms and bathrooms

Single-bedroom properties tend to sell for a lot less than ones with multiple bedrooms. Same goes for the bathrooms: having 2-3 full bathrooms will get you a higher appraisal than if you only have one. 

6. Square footage

A large square footage doesn’t automatically mean the home will get a high appraisal. What matters is how much of this space is livable and usable. 

7. Size of the garage

Having a garage, especially if it’s a large one, can greatly contribute to the real estate appraisal value. Same goes for easy-to-access parking spots located near the house or in the backyard.

8. Trends on the real estate market

If there are currently a lot of properties on the market, and not enough buyers, the appraisal will probably be lower. If it’s the opposite, the house will likely be appraised higher. 

Where can I find a reliable San Diego house inspection company?

Where can I find a reliable San Diego house inspection companySelling or purchasing a piece of residential real estate is a major decision. Learning everything there is to learn about this property is vital if you want to avoid additional expenses and even hazards down the road. 

At Inspectors Company, our home inspection technicians have access to cutting-edge training and state-of-the-art inspection software that allows them to quickly identify any problems that a home might have. Give us a call today.